Vatukoula Gold boosted by better grades and prices

Fiji-based Vatukoula Gold Mines (LON:VGM) swung back into profit in its latest three months on better ore grades and a higher gold price.

Mine profit for the quarter to February was £0.9 million compared to a loss of £2 million in the same period last year. Mine profit for the half year period was £2.3 million compared to a profit of £2.2 million.

Output increased by a quarter to 14.315 ounces compared to the same period a year ago to leave total production for the half year to end February little changed at 29,999 ounces.

Chief executive David Paxton said he was pleased with the performance, adding that underground mining and development increased substantially.

“Through improvements in our underground mining practices we were able to achieve an underground grade of 5.70 g/t, while increasing the development metres.

The improved production and higher grade, along with higher gold prices ensures that we continue to operate on a positive operational free cash flow basis,”

“At the end of the six months gold production from underground remained on target to achieve our forecast production of 65,000 ounces for the current financial year,” he added.

Vatukoula’s production of underground ore for the six months rose to 165,339 tonnes up from 154,000 tonnes, with underground development 13,238 metres up from 11,354 metres in the comparable period.

The miner shipped and sold 13,869 ounces of gold during the quarter and a total of 28,456 ounces for the six months.

Total cash costs per ounce of gold produced in the three months were US$1,419, down from US$1,530 in the same period last year and largely a result of the higher grades delivered to the mill, which increased the gold produced.

Earlier this month, Vatukoula announced it has been chosen as a partner for the Rarawai Biomass Power Project. Once on stream, the new power station is projected to more than halve the costs of power to the group.

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